LONDON, March 19 (Reuters) - Government bond yields across the euro area slid sharply on Thursday after the European Central Bank stepped in with emergency stimulus measures to calm panicked markets in the face of the coronavirus outbreak.
Italy, which has seen its borrowing costs jump sharply in recent days, led the move in yields lower. Its two-year bond yields slumped more than 100 basis points to 0.41%, and was set for its biggest one-day fall since 1996.
Ten-year Italian bonds yields slid as much as 90 bps to 1.40%, while the gap over safer German Bund yields tightened almost 100 bps from Wednesday's closing levels ti around 169 bps.
Spanish and Portuguese 10-year bond yields slid around 30 bps each while benchmark 10-year German Bund yields were down 12 bps at -0.35%.
The ECB launched new bond purchases worth 750 billion euros at an emergency meeting late on Wednesday in a bid to stop a pandemic-induced financial rout shredding the euro zone’s economy and renew concerns about the bloc’s viability.
The new purchases bring this year's planned purchases to 1.1 trillion euro with the newly agreed buys alone worth 6% of the euro area’s GDP. (Reporting by Yoruk Bahceli and Dhara Ranasinghe)